August 4, 2015 Request for Proposals for the Review of Economic Development Finance, Credit Enhancement and Direct Lending Activities Finance Authority of Maine I. Introduction

This Request for Proposals (“RFP”) is issued by the Finance Authority of Maine (“FAME”) for the purpose of soliciting proposals from qualified consulting firms to perform a review of FAME’s economic development finance, credit enhancement and direct lending activities; for the purposes of optimizing the support FAME provides to the economy, businesses and people of Maine. FAME’s vision is to lead the creation of good paying jobs for Maine citizens by working at the nexus between economic and workforce development. FAME was established as Maine’s business finance agency in 1983 and charged with supporting the start-up, expansion and growth plans of Maine’s business community. The agency began working closely with Maine’s lending community to improve access to capital as well as to help fill gaps that exist in the State’s capital delivery system. To meet the financing needs of Maine’s business community, FAME offers a wide array of business assistance programs, ranging from traditional loan insurance programs for both small and larger businesses, to investment tax credits. FAME has also established taxable and tax-exempt bond financing programs that allow strong, creditworthy firms in Maine to access capital at favorable rates and terms. The FAME Business Division staff, the Business Committee of the Board and the Board of Directors provide management and oversight of the commercial loan insurance and direct lending and other economic development finance programs. During the fiscal year ended June 30, 2015, FAME supported the issuance of $85 million in debt capital; impacting over 250 Maine businesses; and creating and/or retaining over 3,000 jobs. However, Maine’s recovery from the Great Recession has lagged the rest of New England and the nation. According to the latest “Measures of Growth” 2015 report by the Maine Development Foundation (MDF), the state’s gross domestic product (GDP) actually declined by (.5%) from 2008 to 2013. New England grew 3.3% and the national economy grew 5.4% during the same period. For further information regarding FAME’s economic development and other business activities please see Appendix 1 – FAME Strategic Plan 2016-2018; Appendix 2 – Annual Report, Fiscal Year 2014; and our website www.famemaine.com .

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II. Solicitation for Proposals FAME intends to hire qualified consultants to provide the following services:

a) Explore the need for additional sources of capital to expand its programs reach, examples may include:

• Expanded loan participation programs • Expanded guarantee funding from private sources • Potential introduction of fund sources to expand programs • Etc.

b) Review the economic development finance landscape in other states (both

surrounding, as well as nationwide) and Canada, and make recommendations to enhance FAME’s ability to support businesses in Maine:

• Program models for consideration • FAME’s current approach • Options for improvement

FAME appreciates qualified consultants will need to develop an understanding of FAME’s existing economic development finance, credit enhancement and direct lending programs as part of this engagement. FAME would like to accomplish these objectives in the most timely and cost-effective manner. III. Minimum Requirements To be considered for the role of qualified consultant, the firm, or individual, must meet the following minimum requirements: • The consulting firm, or contractor, must have provided for at least five (5) years

services comparable to the scope of services contained in this RFP; • The consulting firm, or contractor, must agree to continually disclose all potential

conflicts of interest as such exist or occur; • The consulting firm or contractor is obligated by the terms of its engagement

(including any corresponding confidentiality agreement) to (i) safeguard the Confidential Information as set forth in this Agreement; (ii) return, or certify to the FAME the destruction of, all copies of the Confidential Information at the conclusion of its engagement with the FAME; (iii) not use the Confidential Information for any purpose other than in connection with its engagement with the

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FAME; and (iv) not disclose the Confidential Information outside of the consulting firm or the contractor without the prior written approval of the FAME.

IV. Criteria for Selection The following are the percentage factors that will be utilized to determine selection.

• Qualifications and experience of the applicant (25%) • Applicant’s ability to provide the requested services. (25%) • Quality of applicant’s previous service to economic development organizations

and state agencies (25%) • Applicant’s proposed fees (25%)

V. Format for Proposals Please format your response to this RFP to match the following order to facilitate comparisons between respondents.

A. Organization

1. Describe the firm, date founded and ownership and any subsidiaries and affiliates relevant to your proposal and the primary area of expertise and specific service(s) each entity will provide.

2. Provide the name, address, telephone number and other contact information for

government clients, state economic development organizations, or other financial institutions, for which the qualified consulting firm, or contractor, has provided economic development finance consulting services comparable to the scope of services contained in this RFP.

3. Will the firm disclose all actual or potential conflicts of interest, or appearances of

actual or potential conflicts of interest, as such exist or from time to time may occur?

4. Provide the name of the individual that will be the Primary Consultant, and the

name of the individual who will stand in for the Primary Consultant in the event of an emergency.

5. Is the firm currently able to provide the full scope of services listed in section II? 6. Is there any reason to believe that the firm will not be able to provide the full

scope of services listed in section II throughout the contract term?

7. Fully disclose and describe any relationships with state economic development organizations and agencies that may affect, or appear to affect, consulting services provided.

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8. Describe the types of consulting services the firm provides to state economic

development entities, as well as the fee arrangements that typically apply.

9. Has your firm, its principals, any primary employees, or any affiliate ever:

(i) been the focus of a non-routine Securities and Exchange Commission (SEC) inquiry or investigation or a similar inquiry or investigation from any similar federal, state or self-regulatory body or organization,

(ii) been subject to disciplinary action by any Federal Banking Regulatory Agency or State Banking Supervisory Authority,

(iii) been involved in litigation or other legal proceeding or government investigation involving fraud, negligence, criminal activity or breach of fiduciary duty relating to service provided to any clients, or

(iv) submitted a claim to your errors & omissions, fiduciary liability and/or fidelity bond insurance carrier(s)?

If yes, please provide details.

Briefly describe any currently pending claims or litigation involving your firm? Describe any claims anticipated at this time.

10. Identify any potential conflicts of interest that could exist between FAME and a)

other client interests, or b) that may result from consulting services provided by your firm or affiliated organizations. Describe your firm’s policies and procedures designed to prevent conflicts from occurring.

11. If possible, provide the coverage amount and the name of the carrier for the

following: • Fiduciary liability insurance • Errors and Omissions insurance • Fidelity Bond insurance • Any other applicable insurance

12. Is it the firm’s policy to impose any limitation on liability through your contract with clients? If yes, please describe.

B. Personnel 1. Provide biographies of the personnel that will be assigned to FAME’s consulting

services relationship. The following information must be included: • Full name • Title • Current duties-describe current duties at the firm • Total years economic development experience • Total years economic development consulting experience

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• Total years with the firm • Education-List all post-secondary degrees, professional designations,

licenses, etc., the issuing institutions, and year awarded • Employment history- List employers, dates of employment, and functions

performed as it relates to the scope of services specified herein.

2. Describe the affirmative action programs undertaken by your firm and the number of minorities and women in key managerial positions?

C. Services 1. Explain how the team dedicated to FAME would function. Identify who will be

the primary consultant, who will serve as the back-up consultant in situations when the primary consultant could not attend a meeting, and who will perform the analytical work on the relationship.

2. Describe the timing of written report(s), including recommendations and in

person presentation(s) to the FAME Board of Directors and staff. Also, describe the anticipated end work product, as well as, the frequency of anticipated interim and final report(s).

3. Please list economic development agency, state and local government officials

who have received assistance from your firm. Provide examples of recommendations made by your firm and briefly describe the benefits achieved based on your advice.

4. How many clients has your firm gained in the last 24 months? How many clients

have you lost in the last 24 months and why?

5. What is your firm’s experience in providing economic development finance consulting services?

D. References Please provide three client references with contact information, which can attest to the ability of the respective individual(s) assigned to the account. E. Cost of Services It is anticipated this consulting engagement will be conducted during the last calendar quarter of 2015 and the first quarter of 2016, with the final report presented to FAME staff and Board of Directors, by April 2016. Please break-down your fee by rate(s) per hour, or other fee arrangement you propose. The proposed fee must be inclusive of all fees for services contained within this RFP. Unless specifically disclosed, all minor expenses such as travel, phone, fax and reporting costs, will be included in the fees.

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F. Requirements for Submitting Proposals The purpose of this section is to identify the information that should be submitted in response to this RFP and the order in which it would appear in the proposal. Please limit your response to this RFP to no more than 20 pages; excluding appendices. Cover Letter

The proposal should contain a cover letter and introduction, including the company name, address, and the name and telephone number of the person or persons authorized to represent the proposer regarding all matters related to the proposal. The letter should also contain the following statement:

We have read FAME’s Request for Proposals for Review of Economic Development Finance, Credit Enhancement and Direct Lending Activities (RFP); and fully understand its intent. We certify that we have adequate personnel, equipment and facilities to provide FAME’s requested services that we have indicated we can meet. We understand that our ability to meet the criteria and provide the required services will be judged solely by FAME. In addition, we certify that we have thoroughly examined the RFP to all requirements and our proposed fees cover all the services that we have indicated we can meet, and we acknowledge and accept all terms and conditions included in the RFP.

A person authorized to bind the firm to a contract and authorized to bind the firm to all commitments made in this proposal shall sign this letter. All proposals shall have a statement that the proposer has read and understands all conditions as outlined in this RFP. Notwithstanding any other provision of the RFP, FAME reserves the right to reject all proposals, and to waive any irregularity or informality in a proposal. It is further within the right of FAME to reject proposals that do not contain all elements and information requested in this document. Notwithstanding any other provision of the RFP, FAME reserves the right to accept a proposal which is not the lowest bid Further, should the circumstances require, FAME reserves the right to renegotiate terms of the agreement with selected qualified consultants without re-opening this RFP process.

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Written Questions and Answers

Questions about this RFP may be directed in writing to:

Carlos R. Mello Director of Business & Finance Finance Authority of Maine 5 Community Drive PO Box 949 Augusta, ME 04332-0949 Or; e-mail: cmello@famemaine.com

The deadline for written questions is August 25, 2015. FAME will respond in writing to these questions on or before September 1, 2015. The questions and answers will be forwarded to all potential bidders who have requested a copy of the RFP. Only those answers received in writing will be considered binding.

Deadline for submitting proposals

Please email your response to this RFP in electronic format to cmello@famemaine.com. Or, alternatively, please provide four (4) printed copies of your response to this RFP to:

Carlos R. Mello Director of Business & Finance Finance Authority of Maine 5 Community Drive PO Box 949 Augusta, ME 04332-0949

In either case your response to this RFP must be received by 2:00 pm local time on September 15, 2015. FAME may invite finalists to make oral presentations at its office; however, the final determination as to conducting such will not be determined until the written proposals have been reviewed. If oral presentations are desired, we will want to meet with the team that will actively work on this engagement as set forth in this RFP.

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Schedule of Events Timetable The schedule of events timetable will be as follows: RFPs mailed starting August 4, 2015 Deadline for questions to be received August 25, 2015 Questions answered in writing by September 1, 2015 Proposals due September 15, 2015 Estimated notification date September 30, 2015

FAME will not be liable for any costs incurred in the preparation and production of a response to this RFP. FAME reserves the right to adjust the timetable as necessary.

Revision of Request for Response: FAME alone may elect to amend this RFP prior to the proposal due date. If it is necessary to revise any part of this RFP, an amendment will be provided to all vendors of record. Acknowledgement of the receipt of all issued amendments is required in all proposals. In no case will the RFP be amended within seven (7) days of the proposal due date, unless the amendment includes an extension of time to allow seven days between the amendment and the proposal due date. FAME will not be responsible for any additional costs incurred as a result of said changes in the RFP. Disclosure of Data: All material submitted to the Authority shall be the sole property of the Authority, and material and information submitted may be used by the Authority in any manner it chooses. The Authority is required to comply with the Maine Freedom of Access laws, 1 MRSA §401 et seq., and the confidentiality provisions of the Finance Authority of Maine Act, 10 MRSA §975-A. If a firm believes any information submitted to be confidential, such information should be clearly marked as such and accompanied by a request for confidential treatment based on one or more reasons set forth in 10 M.R.S.A. §975-A. The Authority must disclose, upon request, information not deemed confidential and with respect to confidential information, is nevertheless authorized to disclose it to any person or entity when directed to do so by subpoena, request for production of documents, warrant or other order by competent authority, provided the requirements of 10 MRSA §975-A(3)(H) have been met. FAME reserves the right to reject any and all bids. Attachments:

• FAME Strategic Plan 2016 -2018 Appendix 1 • FAME Annual Report, Fiscal Year 2014 Appendix 2

STRATEGIC PLAN 2016 - 2018

FAME will lead the creation of good paying jobs for Maine citizens by working at the nexus between economic and workforce development.

BRAND

VISION

GOALS

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Table of Contents

Table of Contents ………………………………………………………………………………………………………… 2

Executive Summary …………………………………………………………………………………………………….. 3

FAME’s Mission …………………………………………………………………………………………………………….. 4

FAME’s Values ………………………………………………………………………………………………………………. 4

Background …………………………………………………………………………………………………………………… 4

Environmental Assessment Summary ……………………………………………………………………………. 5

Vision ……………………………………………………………………………………………………………………………. 9

Strategic Goals ………………………………………………………………………………………………………………. 10

Critical Success Factors …………………………………………………………………………………………………. 11

Key Partnerships …………………………………………………………………………………………………………… 13

Critical Capabilities ……………………………………………………………………………………………………….. 14

Financial Projections ……………………………………………………………………………………………………… 15

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Executive Summary

The Finance Authority of Maine (FAME) has developed a 2016-2018 Strategic Plan designed to achieve the goals that build on our Brand Promise: “To aspiring Mainers, FAME is the leading financial resource that expands business and educational opportunities through our willingness to take on greater risk based on public benefit.”

Maine faces significant challenges in the current and expected environment. Notably, the paper industry is going through a period of consolidation and contraction while other manufacturing businesses are emerging slowly from the Great Recession. The five year rate of economic contraction of (-.5%) trails the national average growth of 5.4%. Despite the slower growth rate, Maine is likely to suffer a shortage of skilled workers especially in STEM (Science, Technology, Engineering and Math) fields.

FAME established a new Vision to meet these challenges; “FAME will help lead the creation of good paying jobs for Maine citizens by working at the nexus between economic and workforce development.”

FAME has two Strategic Goals that support the Strategic Vision:

• Continuously improve customer satisfaction by deploying processes that help employees perform to their highest potential. Improve the well-being of FAME employees by implementing processes that ensure their safety,

security and good health. Deploy processes that increase the ease, speed and accuracy of customer-valued services.

• Grow the number of Maine citizens with quality jobs by deploying the resources needed to obtain relevant post-secondary education and drive economic development. Increase the number of Maine citizens with needed workforce skills by building their capacity to

aspire, afford and obtain higher education. Drive economic development by continuously improving the value of FAME services.

FAME’s approach to achieving our strategic goals will be employee empowered and executed through process management with clear results metrics.

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FAME's Mission The Finance Authority of Maine provides access to innovative financial solutions to help Maine citizens pursue business and higher educational opportunities.

FAME’s Core Values Employees will enjoy the same respect, trust, support and caring attitude within FAME as they are

expected to share with every Maine citizen. Maine citizens are our customers, and we measure value through their eyes. FAME will continuously innovate to deliver increased customer value.

FAME's Background FAME was established as Maine's business finance agency in 1983 by the Maine Legislature and charged with supporting the start-up, expansion and growth plans of Maine's business community. The agency began working closely with Maine's lending community to improve access to capital as well as to help fill gaps that exist in the state's capital delivery system. To meet the financing needs of Maine's business community, FAME offers a wide array of business assistance programs, ranging from traditional loan insurance programs for both small and larger businesses, to tax credits for investments that individuals make in dynamic, growth-oriented, manufacturing or export-related firms. FAME has also established taxable and tax-exempt bond financing programs that allow strong, creditworthy firms in Maine to access capital at very favorable rates and terms. In 1990, FAME's mission was significantly expanded when the agency assumed responsibility for administering the state's higher education finance programs. Through a variety of loan, grant and scholarship programs, FAME helps Maine students and families meet the costs associated with higher education. To aid in this important effort, FAME also oversees an extensive outreach and counseling program that is designed to encourage young people to aspire to and pursue higher education. FAME is committed to innovative, adaptable solutions that address the needs of Maine individuals and companies in a changing economic landscape. With a core competency in finance and a highly experienced staff, FAME has the resources that create success.

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Environmental Assessment Summary The chart below maps some of the most critical strategic trends against their rate of change. Trends in the upper right are emerging more quickly and have the greatest impact on the Maine economy. Unfavorable trends are in red, yellow are cautionary, and green are favorable. The chart reveals that Maine is facing a daunting task to revitalize its economy.

LOW

ER

STRA

TEG

IC IM

PACT

HIG

HER

FIVE YEARS RATE OF CHANGE ONE YEAR

WORKFORCE 200,000 retirements

are expected by 2020 EDUCATION

% saving for college fell from 62% to 51% over 6

years

ECONOMIC Maine GDP growing at a

fraction of NE or the national rate

WORKFORCE The shortage of skilled workers is intensifying

FAVORABLE

ECONOMIC Southern ME GDP growing 4X faster than state average

GOVERNMENTAL Maine legislature

considering educational funding increases

EDUCATION Public school tuition flattening after rapid

increases in prior years

UNFAVORABLE CAUTIONARY

EDUCATION Maine’s higher degree attainment is slowly

rising

INFRASTRUCTURE Broadband capability is

42nd

in the nation

INFRASTRUCTURE Cost of doing business in ME is 6.8% over national

average

WORKFORCE # of Mainers 20 - 24 leaving the state has

been greater than those entering.

ECONOMIC Prime rate will increase

gradually throughout forecast

INFRASTRUCTURE Maine’s energy costs are 19.0% over the national

average

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Here is a brief narrative on some of the trends by category. Economic Maine’s recovery from the Great Recession has lagged the rest of New England and the nation. According to the latest “Measures of Growth” 2015 report by the Maine Development Foundation (MDF), the state’s gross domestic product (GDP) actually declined by (.5%) from 2008 to 2013. New England grew 3.3% and the national economy grew 5.4% during the same period. Maine’s GDP recently grew .9% from 2013 over 2012, although the recovery has been uneven. Manufacturing declined by .8% and now represents just 10.0% of the total GDP. Moreover, the

contraction has been most evident in the pulp and paper industry in the northern part of the state. Two mills closed in 2015, and the remaining firms are struggling with lower demand amidst relatively high energy and pulp prices. There is a bright spot in Baileyville, ME where St. Croix Tissue is expanding to meet global demand for tissue.

The southern portion of the state is recovering four times faster than the northern part. Professional Scientific & Technical Services represent 5% of GDP and grew a more solid 2.6% in 2013. Real Estate is the largest portion of Maine’s GDP at 16%, and also managed to grow 1.6% from 2012 to

2013. The Finance and Insurance sectors represent 5% of the state’s GDP and enjoyed the highest level of

growth at 3.8%. The market interest rates are expected to climb during the forecast period from historic lows. Many economists project that the first rate increases will not occur until late 2015 or early 2016. The increases are expected to come in small increments to avoid stalling a delicate recovery. Infrastructure Maine ranks 42nd in the nation for the number of high speed internet subscribers per 1000 according to a study by Camion Associates that was recently published in the 2015 “Measures of Growth” report. Maine’s internet speeds are also far slower than the rest of New England, and rate 49th in the nation on this performance standard. Internet is a critical part of the state’s infrastructure for several reasons: Maine’s rural nature leaves many communities isolated from information and technology without high

speed internet. Businesses cannot operate without high speed download and upload internet capability. Internet access can help expand educational opportunities, especially where long distances can

preclude school attendance. Maine’s cost of energy has declined in recent years, and has competitive rates in New England. However, it is over 19% more expensive than the national average according to the Energy Information Administration. The state is highly dependent on fossil fuels, especially with the recent growth in natural gas consumption. Maine still has the third lowest inflow capacity in the country at 1,112 MMcf (million cubic feet) per day despite the dramatic growth of Maine’s inflow capacity over the last two and one half decades (see chart). That said, capacity has remained constant from 2008 to 2013.

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Three main natural gas lines run through the state (the largest coming from New Brunswick and maintained by the Maritimes/Northeast Pipeline Company). Summit Natural Gas, a subsidiary of Summit Utilities in Colorado, and Maine Natural Gas are planning to increase distribution lines. Summit Natural Gas has engaged in two more projects in Cumberland and Kennebec counties that will result in approximately 150 more miles of distribution lines and 230 miles by 2016 or 289 miles by 2019.

Higher Education A January 2015 study by Plimpton Research concluded, “We found that even after taking out student loans and working part-time, Mainers from low and median income families cannot afford college.” Low income is defined as up to $30,000/yr., median family income as $60,000/yr., upper middle income as $80,000/yr. and high income as $120,000/yr. Several trends have converged to create this situation. Tuition at Maine’s four-year public schools increased 36% from 2004/2005 through 2012/2013 before

declining 2% in 2013/2014 and holding flat in the current year. Federal spending on student aid decreased after during the “Great Recession”, falling 8.5% in just the

2012/2013 school year. Maine State Grant funding has declined from $13.0 million in 2007 to $10.6 million today. This

provides $1,000/student for the approximate 10,000 students FAME can serve at a zero Expected Family Contribution (EFC) level. If this amount had kept pace with inflation, it would be $2,500/student today.

Nationally, the percentage of people saving for college fell from 62% to 51% between 2009 and 2014. Many feel the cost is just too high. In 2011, a survey also found that 57% of Americans question whether the cost of higher education is worth it.

Workforce Maine’s workforce grew from 633,000 in 1990 to a high of 707,200 in 2013 according to the 2015 “Measures of Growth” (published by the Maine Development Foundation and the Maine Economic Growth Council). The Maine Department of Labor, Center for Research and Information, projects the workforce demand could grow to 771,000 by 2020. Unfortunately, 200,000 workers are projected to retire during the period. Growth will be constrained unless more workers with relevant education join the workforce.

Many employers already report difficulty in hiring employees with the needed skills. This is especially true for STEM (Science, Technology, Engineering and Math) related fields. While Maine is roughly on par with the rest of the U.S. with 37.8% of citizens over 25 holding higher degrees, it lags our nearest New England competitors who stand at 45.2%.

Maine Natural Gas Inflow Capacity Year 2008-

2013 2002-2007

2000-2001

1999 1994-1998

Capacity, MMcf/d

1,112 692 654 609 62

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Financial Institutions Maine has 93 banks and credit unions. In general: Lenders are fighting for market share with rates and speed of transaction key factors. Bank consolidation is underway and likely to accelerate as regulatory complexity makes economy of

scale attractive. Average credit size is increasing as is the level of risk. An increasing number of FAME transactions are for startups rather than loans of last resort. Credit unions are expanding throughout the state and taking an increasingly active role in commercial

lending. Government Legislative and Regulatory Trends The Maine 2015/2016 biennial budget is likely to stay fixed at $6.1 billion. Unless offsetting savings are found or bonds floated, there may be only modest changes to the programs influencing FAME. The governor has proposed an increase from $10.0 million/yr. to $15.0 million/yr. over the biennium

for the Maine State Grant, and we are hopeful this will survive the appropriations process. Question 3 in last year’s election provided $4.0 million in bond funding to augment commercial loan

insurance reserves. We hope for those funds in June 2015. The Labor, Commerce, Research and Economic Development Committee (LCRED) has approved two

bills that would greatly enhance FAME’s capital capacity. They are both supported by the governor, but we have a long process ahead before we know their outcome. LD 672: An Act to Improve Access to Capital would increase the maximum commercial

insurance limit from $7.0 million to $10.0 million if the program receives $37.0 million in additional funding.

LD 1140: An Act to Promote Economic Development would increase the maximum Economic Recovery Loan Program (ERLP) amount from $1.0 million to $ 2.0 million, but only takes effect if we receive $ 13.0 million in additional funding.

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Vision

FAME will lead the creation of good paying jobs for the Maine citizens by working at the nexus between economic and workforce development. This vision integrates the educational and business functions within FAME. We are working to create a workforce with the skills needed to drive economic growth while providing innovative financial resources to help insure that good jobs are available in Maine.

FAME needs to partner extensively with other organizations to help meet the demand for workers with relevant skills. Some of the key strategic critical success factors will be:

Expand employer relationships to link higher education attainment directly to workforce needs. Organizations like Educate Maine are already working effectively in this area by helping educators understand the skills that need to be provided to the future workforce. FAME can play a critical partnering role by designing and deploying programs that create incentives for students to study relevant disciplines like STEM.

Lead efforts to make Maine one of the most affordable states for higher education. Maine is currently one of the least affordable states for higher education. We are currently 47th in the country with an average loan indebtedness of almost $30,000/student. FAME can attack this issue on three fronts. Continue to make the NextGen® 529 college savings program attractive to students and their

families through robust matching grant incentives and promotion. Each dollar saved is one that does not need to be borrowed. We will partner closely with the Alfond Scholarship Foundation to promote NextGen investment.

Accelerate the deployment of financial education training that helps students makes wise education and borrowing choices.

Develop student loan programs that offer low cost alternatives. These will be coupled with financial education programs that help minimize the borrower’s debt burden.

FAME will advocate for state funding that raises the level of Maine State Grants. Grants currently average $1,000 for 10,000 students/year.

FAME will become a one-stop shop for Maine citizens seeking financial help to fund higher education. Maine citizens are currently faced with a confusing array of public and private agencies offering both information and programs. We will become a clearinghouse for these programs and continuously advocate for Maine citizens to help minimize the financial burden of higher education.

FAME will develop its status as an axis for financing transactions of any size. We are currently seen as a lender of last resort. Our intent is to be relevant to any transaction that can accelerate economic development in Maine in cooperation with our lender customers.

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Strategic Goals

FAME has two Strategic Goals that support our Strategic Vision:

1.0 Continuously improve customer satisfaction by deploying processes that help employees perform to their highest potential.

FAME believes that satisfied employees who are well supported by capable processes are the bedrock for achieving high levels of customer satisfaction. In short, happy employees lead to happy customers.

Maine citizens are our customers, and we will develop and deploy processes that efficiently and effectively meet or exceed their expectations. FAME embraces process definition and control as a core operating philosophy. Good process management is how we maintain consistency and build the basis for continuous improvement.

We measure value as determined by our customers.

2.0 Grow the number of Maine Citizens with quality jobs by deploying the resources needed to obtain relevant post-secondary education and drive economic development.

The entire FAME team is focused on creating good paying jobs. To achieve this goal, we need to work at the nexus of economic and workforce development. It is a push/pull strategy.

We are pushing to create a workforce that can meet the skill requirements of Maine businesses. We are pulling to create good paying jobs that employ workers at their highest potential.

FAME’s strategic plan has been deployed throughout the organization. Every employee should understand our top goals and their specific role in achieving it. This document does not detail our plan in full depth, but here are the next level steps with critical success factors.

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Critical Success Factors

1.0 Continuously improve customer satisfaction by deploying processes that help employees perform to their highest potential.

1.1 Improve the well-being of FAME employees by implementing processes that ensure their safety, security and good health.

1.1.1 Create an ADA friendly environment 1.1.2 Maintain an excellent safety record through a robust safety program 1.1.3 Deploy processes that support improved employee health 1.1.4 Deploy a standardized problem solving method that enables rapid and best response to

breakdowns 1.1.5 Deploy a standardized project management process to ensure our teams work effectively

to deliver improved value to our customer 1.1.6 Support improved performance by deploying a 360 degree employee appraisal process

1.2 Deploy processes that increase the ease, speed and accuracy of education related services. 1.2.1 Automate Maine State Grant and Educators for Maine management systems by replacing

the EPIC information system 1.2.2 Automate key transaction processes & reports for better accuracy, speed and analysis 1.2.3 Improve customer satisfaction by deploying improved outreach processes such as

Customer Relation Systems (CRM) 1.3 Continuously improve customer valued business processes.

1.3.1 Implement the Enterprise Content Management system to automate document intake, archiving and facilitate underwriting

1.3.2 Streamline the underwriting process to minimize redundancy 1.3.3 Build credit processing capacity by contracting with 3rd party consultants

1.4 Improve customer experience by upgrading the website ease of access and transactional support.

2.0 Grow the number of Maine citizens with quality jobs by deploying the resources needed to obtain relevant postsecondary education and drive economic development.

2.1 Increase the number of Maine citizens with relevant workforce skills by building their capacity to aspire, afford and obtain higher education.

2.1.1 Help more families prepare for postsecondary education by increasing the number who contribute to a NextGen 529 account

2.1.2 Increase the number of Maine citizens enrolling in postsecondary education by expanding FAME’s outreach efforts

2.1.3 Become a one-stop shop for education financing and information 2.1.4 Make Maine a more affordable state for higher education by offering low cost loans

coupled with robust financial counseling 2.1.5 Partner with organizations that are also dedicated to improving the number and quality of

Maine citizens with relevant postsecondary education 2.1.6 Partner with employers to identify critical workforce skill requirements

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2.2 Drive economic development by deploying processes that increase the capital available to Maine businesses.

2.2.1 Explore and develop private capital sources as a supplement to state funding 2.2.2 Ensure that FAME is taking appropriate risk as supported by adequate capital through

ongoing portfolio risk assessment 2.2.3 Ensure FAME has increasingly more valuable service through deployment of a robust new

product development and launch process (NPDL) 2.2.4 Increase sales activity to ensure prospects and customers are aware of and use FAME

services

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Critical Partnerships Maine citizens are our ultimate customers, and FAME will deploy its resources in the state for their benefit. However, we serve them through other direct customers such as Maine lenders and in conjunction with many partners. FAME will partner and coordinate programs extensively. Our goal is to remain efficient and effective. We would rather partner with key agencies than duplicate efforts. Some critical partnerships are: The Office of the Governor Maine Legislature Office of the Treasurer Department of Economic & Community Development Maine’s institutions of higher education Maine Department of Education Maine State Housing Authority Maine Department of Labor Alfond Scholarship Foundation Educate Maine Mitchell Institute Maine Educational Loan Authority (MELA) Maine State and Local Chambers of Commerce American Student Assistance (SALT) Maine College Access Network (Maine CAN) Maine Jump$tart Coalition for Personal Financial Literacy The MELMAC Education Foundation Maine Association of Student Financial Aid Administrators Maine Counseling Association Maine School Counselor Association Maine Education Opportunities Association Maine Development Foundation Maine Community Foundation Community Financial Literacy Maine Adult Education Maine Community Development Financial Institutions Maine Local and Regional Economic Development Agencies Small Business Administration USDA Rural Development ConnectME Authority Maine Technology Institute Small Business Development Centers SCORE Maine International Trade Center Efficiency Maine

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Critical Capabilities FAME needs to maintain and in some cases develop critical capabilities needed to achieve the goals and critical success factors noted in the previous section. Here are the highlights: FAME must develop and maintain high levels of employee satisfaction to support an uncompromised

dedication to customer service. FAME needs to develop the means to capitalize expanded debt offerings. The Authority has solely

depended on the state for direct funding or its moral obligation to support its various programs to supplement internal resources such as fees and interest income. However, our strategic growth plan calls for 10% per year growth of core programs, and we project that FAME will fully utilize its reserve levels by 2018. Future growth may need to leverage an ability to attract capital from private sources.

FAME needs to have a robust New Product Development and Launch process to deliver on the revenue growth projections. We have begun deployment of this process and supportive processes such as Voice of the Customer, but we are in the early stages. Key projects such as the consolidated student loan program or a preferred loan program will depend on this capability.

FAME must maintain and expand its underwriting capability. Risk must be assumed on a managed basis as driven by robust credit and portfolio management processes.

FAME must build its loan making capacity and capability. We envision loan officers who are proactively involved with lenders and the key centers of influence surrounding economic transactions. The loan officers should be supported with internal resources that maximize the time they can effectively spend with clients, including account management processes, and information systems such as Customer Relationship Management.

FAME’s Information Technology systems must be robust. Customer transactions such as lender document uploading and online NextGen transactions should be quick and easy. Additionally, we need to develop and analyze databases that explain the effectiveness of student grant and loan programs.

FAME must maintain and expand its financial education programs to realize our intent to become one of the more affordable states for higher education. While low cost loans are part of the equation, one way to minimize the cost for higher education is to reduce the amount borrowed through good financial decision making. The ability to repay any student loans with a good paying Maine job also determines affordability.

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Financial Projections

Key Points

Total Revenue growth will increase from 1.5% to 4.8% CAGR during the forecast period Loan volume to increase 10%/year with increased outreach. However, increased use of Online

Answering (OLA) at reduced fees is offsetting revenue impact. FAME will add new business and education products at an accelerating rate. This is especially

critical for the business division to fund loan losses where we have a long term goal of fully funding loan loss provisions with business revenues.

NextGen 529 program growth and stable markets are predicted in the forecast Expenses will grow slower than revenue in forecast years.

$750,000 added in 2015 with Merrill Lynch transferring marketing responsibility to FAME. Merrill Lynch will fund this investment until 2023.

We are investing in growth processes in 2015 through 2016 and expect dividends in out years. Non-operating Expenses will increase as we maximize the disbursement of Maine State Grant and

NextGen administrative fees back to Maine Citizens in the form of grants. 2016 expenses are offset by $4.0 million Commercial Loan Insurance funding from state. The strategic forecast does not include special expenditures that may occur as FAME identifies

appropriate opportunities.

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